Legal Question in Business Law in California
Breach of contract
I sold my spa to a lady and we signed a contract in 9/08. She paid me the half of the sales price. The rest was to be paid over the next couple of months. I lowered my price verbally becuase of the economy on the terms that she pay me out. She paid me $20K out of the $30K that we agreed on. That was in 12/08. She has not paid me the balance. I have been after her for 3 months. No payment. I want to send her a demand letter. Is she in breach? I don't want to take back ownership of the shop, but feel like I need to do something since this is going on month 7. So frustrated. Do I have a case to ask her to pay up if there was no specified date to when she had to pay me out, she has made no payment for 3 months. I had another buyer at that time and went back and forth between the two until I promised it to the current buyer because she approached me first. Can I sue her and go back to original terms if our contract stated that any ammendments had to be done in writing? I want to give her a chance but I have been more than patient and generous buy reducing the sales price by 30%.
6 Answers from Attorneys
Re: Breach of contract
Send her a demand letter, then sue for $7500 in small claims court -- write off the rest, you'd only have to spend most of it on attorney fees to sue in non-small-claims court. Unless, of course, you included language in the contract that she has to pay your attorney fees and costs of collection.
Re: Breach of contract
I read Mr. Stone's answer and understand where he's coming from, but respectfully disagree on the patness of the answer. Mr. Stone's concern is that the amount in dispute in a very frustrating zone in our legal system - above small claims but small enough to get gobbled up quickly by attorney fees and costs. Unless there is a provision where you can recoup those fees, it can be frustrating for both the attorney and the client (who often ends up angry with the attorney - cringe) even when forewarned of this issue. The small claims approach suggested by Mr. Stone minimizes these frustrations in getting to a judgment. On the flip side, however, a personal demand letter and/or a small claims case are easier to ignore/defend. Another approach is to partner with an attorney with close controls on how much you're going to put into the case. An attorney's demand letter may frankly/sadly get more attention. In these economic times, I find that people in trouble pay the squeakiest wheels first. With years of experience feeling out where people are at, what can be negotiated, and when to cut losses, an attorney can be a valuable tool if you're willing to spend a defined amount for that value. If you're just going to get frustrated with the attorney if the answers aren't what you hoped, please default to Mr. Stone's recommendation. There is no way to provide the guarantees that clients want in these cases! Also, you have to be clear with your attorney about your goals and limitations up front. It can be a close call whether to cut losses personally or call in an attorney in these cases where the amount of money involved is small enough that attorney fees are a gamble but enough that it can seem like a fortune to lose for many folks. Your gut intuition and knowledge of the people on the other side of this problem may provide you with further clues on the best approach. Best wishes in finding a favorable solution.
Re: Breach of contract
Step 1 is also to go back to the terms of the agreement.
You have a written contract for sale of the spa. Key questions for you are whether there is an attorney's fees provision and whether there is anything that governs what happens in the event of buyer's breach.
You can certainly cut your losses and sue for $7,500 in small claims. You can also hire an attorney and get a potentially larger judgment.
I do a lot of collection work, please email so that we can discuss this with more specifics -- let me see the contract, and I can give you a better answer.
Re: Breach of contract
It looks like lots of good answers already, so I will just defer to counsel. Good luck.
Re: Breach of contract
It looks like lots of good answers already, so I will just defer to counsel. Good luck.
Re: Breach of contract
It looks like lots of good answers already, so I will just defer to counsel. Good luck.
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